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Analysts Say On-Demand Model Is Next Big Thing
Facing the same pressures as their large enterprises, growing companies are increasingly turning to hosted and software-as-a-service (SaaS), or on
-demand, models as a less capital-intensive way to drive business performance.
For those businesses that choose to go it alone, the combined costs of hardware, software and skilled technical staff can be a real drag on
profitability. Add in the cost of ancillary (but critical) functions such as disaster recovery and backup, and the total cost of ownership can quickly
become burdensome.
But a hosted services model slashes up-front investments as well as ongoing service and maintenance costs, putting top-tier software solutions within
reach of even very small companies.
Transformative Trend
A recent InfoWorld article titled “The Next Big Things in IT” puts on demand for growing companies near the top of the
list of transformative trends in IT.
“In the near future, there’s
only one way to go when it comes to purchasing business software—and that’s out of house,” declares the article’s
author. “For lean, mean businesses looking for maximum features and flexibility with a minimum overall cost, SaaS and hosted software
simply have nowhere to go but up.”
In another report, AMI Partners predicts that
in 2007 alone, businesses with limited budgets around the world will increase spending for on demand software by 17 percent to almost US$2.5
billion.
“Hosted/SaaS CRM [customer
relationship management] and ERP/SCM [enterprise resource planning/supply chain management] are gaining market share over packaged
software as more and more midsize businesses opt for these hosted services for their mission-critical applications,” says Spencer
Richardson, a New York-based analyst at AMI.
Oracle On Demand Leads
the Trend
In the eight years since its launch, Oracle On Demand has developed the broadest portfolio of on-
demand solutions on the market, including Oracle database and middleware technology, as well as enterprise applications such as Oracle E-Business
Suite, PeopleSoft Enterprise, and JD Edwards (more than 360 solutions in all). At the same time, customers have the flexibility to choose the mix of
services that best meets their business needs: subscription managed or hosted applications.
Reflecting wider industry growth trends, Oracle On Demand already has hundreds of satisfied customers. One is OGIO, a 100-person, US$40 million
company based in Utah that designs and distributes cutting-edge gear bags—from golf bags to snowboarding duffels.
“We
have a tiny IT staff,” says Angie Springer, OGIO’s director of information systems; yet, she was still determined to “drive
time out of our processes and become more efficient through our systems.”
To help
make that happen, OGIO is using the full capabilities of the Oracle E-Business Suite through Oracle On Demand.
“Our whole business runs on Oracle,” says Springer. “We even do EDI [electronic data exchange] through our Oracle
system.”
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